There are reports that Apple plans to launch a video subscription service to counter Netflix and various other services. Contrarily, Citi analysts said that Apple might buy the streaming giant by taking advantage of Donald Trump’s corporate tax cut.
Citi analysts Jim Suva and Asiya Merchant said that Apple would acquire Netflix seems to be at a 40 percent chance. Under the new U.S. taxing rules, Apple will repatriate about $220 billion in cash to the US.
“The firm has too much cash, nearly $250 billion growing at $50 billion a year,” Suva and Merchant said. “This is a good problem to have.”
“Historically, Apple has avoided repatriating cash to the US to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion for mergers and acquisitions (M&A) or buybacks.”
A Business Insider report said that iTunes had been a huge hit for the company. Still, most viewers have since migrated to video streaming services such as Hulu, Netflix, or Amazon. This seems to leave Apple in a difficult position from which to compete.
Reports from September 2017 said that Apple might be leasing their $1 million Culver Studios in California as they plan to put a billion dollars into movies and television.
In Silicon Valley, there is growing competition in the video streaming business. In the past few years, YouTube introduced “Youtube Red,” which gives users the option to pay to see their favorite content creators make high-budget television productions. Amazon has also become a force in the market with their Oscar-winning show, “Manchester By the Sea.”
Apple has already hired the reputable Sony duo Jamie Erlicht and Zack Van Amburg to start their venture into video streaming and is reportedly developing a new TV show that will star Reese Witherspoon and Jennifer Aniston.